GBP/USD Fundamental Analysis – week of July 24, 2017

The GBPUSD had a very difficult week after promising the sky in the week before. Following the weak CPI and retail sales data from the US in the week before, we saw the pair shoot up through the 1.3030 region and have a look above the 1.31 region briefly that day. The traders and the market in general would have expected to see a continuation of the move last week, especially with the dollar being so weak at this point of time.

GBPUSD Weakens and Looks Subdued

But they were left largely disappointed as the pound failed to make use of the weakness in the dollar. The early part of the week saw the pair correct itself below 1.30 and though this was part of a correction brought about by the slight recovery in the dollar and the same reaction was seen in the euro as well, the move brought forth the weakness underneath. The economic data from the UK was also weak, which broke the trend of strong data from them over the last few months. The market expected a recovery once the dollar began to weakne again but this did not happen as well.

The dollar weakened towards the end of the week as report of investigations into the business transactions of Trump began to float around and though most of the other currencies used the opportunity to move higher, The GBPUSD pair continued to stay subdued. In fact, some good data from the UK in the form of a strong retail sales report was not enough to push the pair high and it closed the week below 1.30 and it looks as though we may be in for more losses in the coming week. It is clear that confusion and uncertainty regarding the Brexit procss continues to plague the pound

Looking ahead to the coming week, we are moving towards the end of the month when the economic events and data dry up and we have an almost empty economic calendar for next week with only the FOMC statement from the US being anything of note. We expect the GBPUSD pair to continue to trade weakly with the region around 1.3030 continuing to be the key.